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Towards a green economy Conclusions


Moving towards a green economy has the potential to achieve sustainable development and eradicate poverty on an unprecedented scale, with speed and effectiveness. This potential derives from two concurrent changes. First, there is a changed playing field in which our world and the risks we face have materially changed. These changes require a fundamental rethinking of our approach to the economy. Second, there is a growing recognition that the natural environment forms the basis of our physical assets and must be managed as a source of growth, prosperity and well-being.


As this report has argued, reallocating public and private investments – spurred through appropriate policy reforms and enabling conditions – is needed to build up or enhance natural capital such as forests, water, soil and fish stocks, which are particularly important for the rural poor. Green investments will enhance new sectors and technologies that will be the main sources of economic development and growth of the future: renewable energy technologies, resource and energy efficient buildings and equipment, low-carbon public transport systems, infrastructure for fuel efficient and clean energy vehicles, and waste management and recycling facilities. Complementary investments are required in human capital, including greening-related knowledge, management and technical skills to ensure a smooth transition to a more sustainable development pathway.


One of the major findings of this report is that a green economy supports growth, income and jobs, and that the so-called trade-off between economic progress and environmental sustainability is a myth, especially if one measures wealth as stocks of useful assets, inclusive of natural assets, and not narrowly as flows of produced output. The results of the report indicate that in the short term, economic growth under a green scenario may be less than under business-as-usual. However, in the longer term – 2020 and beyond – moving towards a green economy would outperform business-as-usual by both traditional measures (GDP growth) as well as more holistic measures (per capita growth).


The report also finds that in a number of important sectors, such as agriculture, buildings, forestry and transport, a green economy delivers more jobs in the short, medium and long-term than business-as-usual. In sectors where capital is severely depleted, such as fisheries, greening will necessitate the loss of income and jobs in the short and medium-term to replenish natural stocks, but this will prevent the permanent


loss of income and jobs. In such cases, transitional arrangements are needed to protect workers from negative impacts on their livelihoods.


Although the bulk of the investments required for the green transformation will come from the private sector, public policy will also play a leading role in overcoming distortions introduced by perverse subsidies and externalised costs. In addition, public investment will be required to jump-start an effective transition to a green economy.


There is much more private capital available than the financial resources of the public sector. However, many developing countries have limited access to private capital. A large amount of the funds needed for green investments at scale in the initial stages of the transition towards a green economy must come from new and innovative financing mechanisms. In this regard, the new Green Climate Fund and nascent REDD+ funding mechanisms offer significant hope for achieving the finance required. Where national budgetary conditions are limited, multilateral development banks are ideally positioned to offer financial assistance to enable these countries to embark on a green development trajectory.


Directions for further research This report has analysed the enabling conditions required to mobilise investment, and the potential benefits of this investment in greening the world economy.


It


has provided fresh perspectives on the synergistic relationships between investing in low-carbon, resource efficient growth.


technology and socially inclusive economic


Inevitably, as new research is provided new boundaries of knowledge and gaps are found. A number of areas where further research will be needed to provide more specific guidance on a green economy transformation have emerged in the process of writing this report. These areas include research to answer the following questions, among others:


1. How to manage a smooth and fair transition from a brown economy to a green one at global level? In this report, responses to transitional issues have focused on capacity building, training and educational efforts. Also important, however, is how countries should set an appropriate pace for a transition from the predominantly brown economy to a green one. Many countries are facing rigidities of an infrastructure and industrial base that was developed under the brown economic model.


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